(Bloomberg) -- The European Central Bank shouldn’t precommit to a certain outcome before its next meeting, according to Governing Council member Madis Muller.
“I think it’s important that if the next ECB Governing Council meeting is in September that we wouldn’t promise too much in advance,” the Estonian central banker said on Friday, adding that it’s hard for him to say how many interest-rate cuts there may be in 2024.
Speaking in an interview with local radio Aripaev, Muller acknowledged that “if you look at financial markets’ priced-in expectations, it’s true that at least one more cut is expected — but I personally wouldn’t comment.”
The ECB on Thursday kept its deposit rate at 3.75%, with President Christine Lagarde saying the next policy gathering — on Sept. 11-12 — is “wide open.” Still, with inflation pressures still lingering, officials are becoming less confident that a path for two further reductions is realistic, and don’t want investors to assume that a move in September is a done deal, according to people familiar with the matter.
“We know there still are fluctuations” on consumer-price growth, Muller said, highlighting that services inflation around 4% and wage growth at 5% are “not in line with the 2% target.”
Still, “I think it’s realistic that in next 12 months, the inflation will continue to be see a decelerating trend,” he said.
Muller also said that the euro-area economy should recover in coming quarters, though the outlook has slightly deteriorated recently.
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